4 Ways To Build Your Credit From Scratch

Living in today’s world without credit is almost impossible. You need credit to do everything from Reserving a hotel room to renting a car. Basically everything you want to do online takes credit. Not having it puts you at huge disadvantage.

Not having good credit is almost as damaging. Building and maintaining a good credit history are important steps towards a secure financial future. If you are one of the few people who didn’t have a parent to help you start credit when you were young getting your credit path started may seem frustrating. It can be hard to get credit because you’ve never had credit. It can seem like a cruel joke.

However, there are some steps you can take to start establishing a strong credit history.

Yahoo Finance has a great article on how to help you build your credit history. It is filled with a lot of great advice. These great steps will help you get headed on the right path toward building a strong credit history.

Apply for a secured credit card  

Building your credit is somewhat of a Catch-22. You need a credit card to build credit history – and demonstrate that you’re able to pay off your debt on time – but you generally can’t get approved for one when you have no existing credit. It can get frustrating but there a secured credit card can help you get out of this cycle.

Become an authorized user

Becoming an authorized user on someone else’s credit card might be one of the easiest ways to build credit. If you have a close relative, like your mom or dad, with a good credit score, ask if they could add you as an authorized user to their account. Without having to actually do anything yourself, all activity on the card will be reported to your credit score.

Report your rent

This wasn’t always the case, but as of 2010 when Experian acquired RentBureau, your rental payment history can now be factored into your credit score. There are now several companies that work with Experian to report your payments but you have to sign up first.

Open a store credit card

Some may advise against opening a store credit card: these cards typically have high annual percentage rates (APR). But when trying to build your credit, a store card may be your saving grace.

To gain a better understanding read the full story here. It is full of great advice.